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“Each initiative will be sensitive and difficult”

21 April 2015 | netopia

Questions to Andrus Ansip, Vice President of the European Commission

Brussels is holding its breath in anticipation of the Commission’s Digital Single Market proposals. Love it or hate it, Netopia talks to the actors and gets the complete view. First out is none other than the Commission’s Vice President for the Digital Single Market Andrus Ansip.

Per Strömbäck: What is the Digital Single Market? What are your expectations for the Digital Single Market?

Andrus Ansip: My vision for the Digital Single Market is a space where people will enjoy the same freedoms online as they do offline.

Some years ago, we opened Europe’s borders. People are no longer separated by a fence or wall. But in the online world, these borders still exist. Too many Europeans cannot use online services that are available in other EU countries, often without any justification; or they are re-routed to a local store with different prices. They are “geo-blocked”. Small companies could make more benefits if they were able to sell their products and services in other EU countries. At the moment, only 7% of smaller businesses in the EU sell cross-border. It is too complicated and expensive for them. There are too many obstacles.

I want to change this situation and make sure that people and businesses can make the most out of digital opportunities. The Digital Single Market represents a powerhouse for generating jobs and growth; for stimulating competition, investment and innovation. It could contribute €340 billion to Europe’s growth per year.

At the end of March, with all the Commissioners, we agreed that action is needed in three areas: ensuring a better access for users and businesses to digital goods and services; setting the right rules and conditions for those in the market, both traditional and newcomers; and tackling issues of data, skills and common standards, for European citizens and industry to make the most out of the digital economy.

On May 6, we will come with specific solutions. We need to be ambitious. Otherwise, Europe will wait many more years to enjoy these basic digital freedoms.

PS: Is there a single European digital demand and single European digital supply? It is possible to make pan-European licenses and services today, what can intervention accomplish?

AA: There is a demand for cross-border online services. A 100 million Europeans would like to access content cross-border. People are ready to pay to get their films or music legally. But when they try, they are told they come from the ‘wrong’ country.

And small businesses are willing to sell across borders. If the rules were the same, or simpler, in all EU countries, more than half of companies would sell across the EU.

I see many innovative European startups which go to the United States to scale up because they cannot grow in Europe. There are too many obstacles.

This is exactly the kind of issue that we want to address. By creating a Digital Single Market, we will break down borders and create a fair level playing field where all companies offering their goods or services in the EU are subject to the same data protection and consumer rules. This will guarantee legal certainty and will help our innovative startups scale up.

You mention pan-European licences. The current EU copyright framework does allow licensing deals covering a multitude of territories. In fact, such multi-territorial licensing is already a reality in some creative sectors, for example, music (for some rights) and books. Situations are different across sectors and Member States. But where, in order to expand the service, there is a need to obtain a separate copyright licence for each EU Member State, multinational corporations usually have more resources at their disposal to deal with it.

Simplifying the licensing environment will, therefore, reduce the transaction costs for businesses and, ultimately, bring about more content and greater choice of services to users everywhere in Europe. In particular, the smaller European service providers could find it easier to reach sufficient scale for their business activities and compete with the global platforms.

PS: The “winner-takes-all”-dynamics of digital markets tend to produce dominant players. Do you see this as a threat to a well-functioning Digital Single Market? How can fair competition be guaranteed on a Digital Single Market? Will you put in place a European competition watch-dog?

AA: Dominant players can cope with a fragmented market, with 28 different consumer and data protection rules across Europe. Small players cannot. If they wish to trade in another EU country, they face around €9,000 extra costs for having to adapt to national laws. This should change. We want to create an area where EU businesses can seamlessly access and exercise online activities under conditions of fair competition, no matter where they are based. A Digital Single Market can create opportunities for new startups and allow existing companies to grow and profit from the scale of a market of over 500 million people.

To achieve this, we will notably harmonise consumer and contract rules. We will also review telecoms and media rules to make them fit for new challenges, in particular relating to consumer uses (for example the increasing number of voice calls made over the internet) and new players in the field.

All this is about creating the right conditions for digital networks and services to flourish.

This does not mean there won’t be dominant players. The issue is not about dominance but about potential abuse of that dominant position. And we already have competition tools to address such situations.

PS: There is a focus on copyright in the suggestions for the Digital Single Market, why is that? There are many other obstacles to a truly integrated market: taxation, marketing regulation, spectrum allocation, infrastructure… even customer service in local language: why the focus on copyright? Can copyright reform alone make a Digital Single Market?

AA: We have been talking about the copyright reform for a while now. A public consultation on the review of EU copyright rules was undertaken between December 2013 and March 2014. There was a great interest with around 10,000 replies, of which almost 60% came from end users.

But if you look at the three areas of action that we agreed on in March, you can see that this is not only about copyright. There are indeed many other obstacles. We need more transparency regarding parcel delivery costs, simplified VAT arrangements, telecoms and media rules fit for the digital age, spectrum management at EU level, improvement in standards and interoperability, and more.

We will act on several fronts – and where EU action is the most efficient.

But I am under no illusions: each initiative that we will put forward will be as sensitive and difficult as the copyright reform.

PS: Cultural diversity is a European success factor – how does that relate to the Digital Single Market?

AA: Cultural diversity is at the core of European values – we need to protect it and nurture it. I hear some concerns about the copyright reform because one of our aims is to facilitate access to culture across borders. Well, this is all about cultural diversity: this is about allowing users to see or listen to masterpieces from other EU countries. I have never said this should be for free of course. We need to ensure a fair remuneration of all those involved in the creative sector.

Copyright should not be seen as a problem for users. New technologies should not been seen as a threat for creators. We need a win-win situation and we will come with the right balance between the interests of users and those of creators later this year.

PS: Another big digital topic at the moment is “network neutrality”. How does that relate to the Digital Single Market?

AA: I want to protect the right of Europeans to have unfettered access to the internet. People should not be unfairly blocked or slowed down when they use the internet. Content and application providers should make their content available without discrimination. We need these principles into EU law as soon as possible; otherwise we will have 28 different approaches in Europe and this will be a problem for both users and businesses.

EU rules should also allow European industry to innovate and provide better services for consumers.

We are now negotiating a text with the European Parliament and the Council. We need an ambitious agreement as soon as possible as the Telecoms Single Market will be an essential building block of the Digital Single Market.